It’s a crypto chaos

Good morning! Welcome to The Daily Moon. While the world’s busy with SBF, Celsius tried to buy more time. The bankrupt crypto lender apparently needs over four more months to come up with a rescue plan. Wonder what groundbreaking idea it's working on.  

The markets recovered after lower inflation numbers. Bitcoin was ~$17,600 while Ethereum inched close to $1,300. Nasdaq rose in early trade. Back home, Sensex and Nifty faced losses. 

SBF And The Crypto Mayhem

Cash crunch rumours. A buyout deal. Then a quick reversal. It all happened in three days. The failed acquisition of FTX by Binance shook the crypto markets. Bitcoin and Ethereum crashed into a sea of red. Solana fell by ~40%. 

Terra memories We got over the Terra de-peg only in May, but not unscathed. A bunch of crypto firms filed for bankruptcy soon after and investors lost millions. FTX seems to be headed the same way. Its CEO Sam Bankman-Fried wants $8 billion in emergency funds to tide over the crisis. If not, it’ll get worse! 

Meanwhile, one of its backers, Sequoia Capital, has said that its FTX investment is now worth zero. 

What hurt BTC’s feelings?SBF was known to be a crypto boss flush with cash. Now he’s run out of money. That’s a terrible signal for crypto investors. Here’s what may happen: 

1. A BTC selloff triggered by fears of a price slide.

2. More BTCs=Lower price 

3. Token withdrawals and mass dump

BTC hit a two-year low. Ethereum has inched closer to $1,200. Tether de-pegged and TRONDAO pitched in to buy $300 million worth of USDT tokens. Solana’s the worst of the lot because it’s exposed to SBF’s Alameda. A few exchanges have paused or placed restrictions on Solana transactions to avoid a total collapse.  

There’s a regulatory angle too. The US SEC has started an investigation into FTX.  SBF has taken the blame in a series of cryptic tweets. 

Is there a safe exit?We don’t know yet. FTX may go bankrupt without the cash. CZ won’t help. Tron’s Justin Sun says he is “working” on a solution with FTX. Fingers crossed. 

Midterms Rattle Stocks

Do the Blues have it? Will the Reds take the House? It’s still too close to call. The markets don’t like uncertainty. Dow and S&P 500 had their worst election day fall in almost a decade. Nasdaq slid 2.5% too. 

What’s at stake?Investors want clarity on who will control the House and Senate. The new Senators and Congresspersons will decide what happens to laws related to inflation and climate change. These laws, in turn, will reshape how much profits some of the listed companies earn. 

Till the results are announced, nobody wants to buy too many stocks. India’s Sensex and Nifty took a similar route and dipped. 

Rate hike fearsThe US released inflation data on Thursday. Prices have cooled. Good news for now. But is it enough for the Fed? 

OpenSea Back Tracks

OpenSea is “awed by the passion” of creators and collectors. Their words, not ours. Last week, the largest NFT marketplace said it will make creator royalties optional. And creators weren’t amused.

Oh, so a complete turnaround?Yes. A rollback, if you will. 

OpenSea was trying to compete with other marketplaces that do not impose creator royalties. Which means traders and collectors had to pay less. And who wants to pay extra, especially in this market, right? 

But OpenSea didn’t expect the backlash that followed. 

Snubbed by (nearly) allThe BoredApe Yacht Club entered the debate, proposing an alternative way to implement creator royalties. One of the most compelling arguments for keeping royalties came from a 19-year-old NFT artist Victor, who goes by the pseudonym FEWOCiOUS:

Guess all’s well that ends well.

No Digital Currencies Here

Central banks in countries across the world are finding love in digital currency. There are plans and studies and proposals to bring in CBDCs. But there are those who have tried and given up. Here are a few, and why they scrapped the projects:

Denmark- Tried in 2016. Dropped the plan because it wasn’t sure how a CBDC would be better than the current digital payments system.

Japan- Began studying CBDC in 2020. Scrapped the plan in January 2022, citing risks to financial stability. 

Ecuador- Released electronic currency in 2014. Deactivated in 2018 after its electronic money system was abolished. 

Finland- Claims its Avant smart cards project in 1993 was the world’s first CBDC. It was discontinued in 2006 because it became more expensive than debit cards.

Have these guys thought about Altcoins? Just wondering.

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Who are we? This newsletter’s ambition is to educate (and to entertain). The world of money is changing everyday and we want to help you decode what’s happening in the world of crypto, public markets in the US and India.